Securing HGB Property Ownership through PT PMA in Indonesia

25 March 2024 By admin

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Indonesia’s tourism hotspot like Bali, Lombok, and Nusa Tenggara have emerged as prime destinations for investors eyeing expansion in the flourishing tourism and hospitality sector. With an array of opportunities spanning villas, hotels, resorts, cafes, restaurants, and beach clubs, the allure of these picturesque locales is undeniable. The potential for growth in these regions has attracted investors keen on capitalizing on the increasing demand for accommodation, dining, and entertainment options. Establishing a presence in these areas requires a strategic approach, and acquiring HGB property through PT PMA offers a pathway for foreign investors to participate in this lucrative market.

This article aims to provide a concise and clear guide on acquiring HGB (Hak Guna Bangunan) property through a PT PMA (Perseroan Terbatas Penanaman Modal Asing) – a Foreign Investment Company. Understanding the intricacies of this process is crucial for investors navigating the competitive landscape of these sought-after destinations.

Understanding the Distinction: HGB vs. Other Titles

In the HGB title, the PT PMA is registered as the owner, enabling full rights to transfer the property throughout its validity. This stands in contrast to Hak Pakai and Hak Sewa, which only grant the right to use the land/property, limiting the ability to transfer the title without the landlord’s consent. Notably, HGB can be converted back to Hak Milik if the property is transferred to an Indonesian national, providing enhanced flexibility in property sales.

While Hak Milik is reserved for private use, HGB is primarily intended for commercial purposes, making it a preferred choice for property developers engaged in selling developed properties. Regardless of zoning, PT PMAs can acquire any land or property, but consideration of land zoning is crucial for obtaining necessary permits and business licenses.

Acquiring Property in Indonesia through PT PMA: A Secure Investment Approach

When it comes to foreigners buying property in Indonesia, opting for a PT PMA (Perseroan Terbatas Penanaman Modal Asing) is considered the safest route. This legal entity allows you to register your company, granting the ability to acquire freehold land and properties under the Hak Guna Bangunan (HGB) title. With PT PMA, foreigners can hold this title for a maximum of 80 years, providing a level of security akin to the lifetime Hak Milik title. This method offers greater control over the property compared to a regular leasehold, making it a preferred choice for investors eyeing long-term ventures.

Foreigners can legally own land in Indonesia through a PMA (Perseroan Terbatas Penanaman Modal Asing). A PMA is a foreign-owned limited liability company that is permitted to conduct business and acquire property in the country. Investors from abroad can opt to establish a PT PMA, providing them the avenue to buy either freehold or leasehold property through the company.

The process of setting up a PT PMA involves submitting an application to the Investment Coordinating Board (BKPM). This application should encompass a detailed business plan, financial statements, and evidence of the investment funds. Following approval, the PT PMA will undergo registration with the Ministry of Law and Human Rights.

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What is PT PMA

The Application Process

Land Selection:

Identify a strategic location that aligns with your business goals. Ensure the land is suitable for the intended development.

Approval from the Indonesian Investment Coordinating Board (BKPM):

Submit necessary documents to BKPM for approval, including the company’s articles of association, business plan, and financial projections.

Land Acquisition and HGB Application:

Acquire the selected land and submit the HGB application to the National Land Agency (BPN). This involves providing a land certificate, land location permit, and other required documents.

Establishing PT PMA:

Register a new PT PMA or acquire an existing one, aligning with your intended business category (e.g., Hospitality Management Consulting or Real Estate). The process typically takes 2-3 weeks. Once the PT PMA is successfully registered, it gains the legal capacity to acquire land and property within Indonesia.

Minimum Capital Requirement:

As per Article 12 paragraph (7) of BKPM Regulation 4/2021, PT PMAs should meet a minimum capital requirement, typically IDR 10,000,000,000 (ten billion Rupiah), unless specified otherwise by law.

Agreement Signing and Title Transfer:

After securing a property deal, draft a Binding Sale & Purchase Agreement (PPJB) in the name of your PT PMA. Upon agreement signing, the Land Office converts the land certificate from Hak Milik to HGB. The finalization involves signing the Sale and Purchase Agreement (AJB) and completing the transaction tax payment.

While investing in PT PMA requires significant time and capital, it offers unparalleled long-term advantages, allowing acquisition of freehold properties and providing robust legal protection over investments. Collaborating with a reliable agent and legal partners is instrumental in securing a sound investment. For expert advice on real estate matters, feel free to contact us for guidance.

Benefits of Owning Land through a PMA in Indonesia:

Get Your HGB through PT PMA

Here are some key advantages of acquiring land through a PT PMA in Indonesia:

Full Ownership and Control: PT PMAs have complete ownership and control over the land, offering a higher level of authority compared to regular leaseholds.

Versatility in Usage: PT PMAs can utilize the land for various purposes, including construction, selling, or leasing to others. The flexibility extends to using the land as collateral for loans.

Extended HGB Title: PT PMAs can renew the HGB title for additional periods of 20 years each, with the possibility of reaching a maximum tenure of 100 years.

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Get Your HGB through PT PMA with Synergy Pro’s Help

Navigating the complexities of acquiring Hak Guna Bangunan (HGB) through a PT PMA (Perseroan Terbatas Penanaman Modal Asing) in Indonesia requires expertise and a reliable partner. Synergy Pro stands as a leading firm dedicated to assisting foreign investors in seamlessly acquiring HGB titles through the PT PMA structure.

Regulatory Compliance:

Synergy Pro specializes in ensuring that foreign investors adhere to all legal requirements in the acquisition process. We are well-versed in the intricacies of Indonesian regulations, providing a streamlined path for investors.

PT PMA Establishment:

Our team assists in the efficient establishment of a PT PMA, facilitating the submission of applications to the Investment Coordinating Board (BKPM), and guiding investors through the registration process with the Ministry of Law and Human Rights.

HGB Acquisition:

With a focus on Hak Guna Bangunan, Synergy Pro offers comprehensive support in obtaining and managing HGB titles. We understand the nuances of the acquisition process and work diligently to secure the necessary approvals.

Documentation and Due Diligence:

Synergy Pro conducts thorough due diligence on selected properties, ensuring that all documentation is in order. We work to mitigate risks and ensure a smooth acquisition process.